1. New Product Development and Product Life-Cycle Strategies
Chapter 11
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Principles of Marketing, Sixth Canadian Edition

2. Learning Objectives
After studying this chapter, you should be able to:
Explain how companies find and develop new-product ideas
List and define the steps in the new-product development process
Describe the stages of the product life cycle
Describe how marketing strategies change during the product’s life cycle
Principles of Marketing, Sixth Canadian Edition

3. Major Stages in New Product Development
Idea generation: systematic search for new ideas
Internal sources: brainstorming
External sources: customers, competitors, distributors and suppliers
Figure 11.1
Idea screening: identify good ideas and drop poor ones
Usefulness to consumers
Good for company
Fit with objectives and strategies
Have the resources
Add value
Principles of Marketing, Sixth Canadian Edition

4. Major Stages in New Product Development
Concept development: detailed version of the product concept in meaningful consumer terms
Concept testing: testing new-product concepts for consumer appeal
Figure 11.1
Marketing strategy: initial strategy for product concept:
Target market, positioning, and sales, market share, and profit goals
Price, distribution, and marketing budget
Strategy statement, long-run sales, profit goals, and marketing mix
Principles of Marketing, Sixth Canadian Edition

5. Major Stages in New Product Development
Business analysis: review of sales, costs, and profit projections to determine if they meet company objectives.
Figure 11.1
Product development: developing the product concept into a physical product
Large investment
Building a prototype
Testing for safety, durability, and acceptability
Principles of Marketing, Sixth Canadian Edition

6. Major Stages in New Product Development
Test marketing: testing the product in more realistic market settings
Determine the target market profile
Figure 11.1
Assess consumer acceptability, trial, repeat purchase rate
Evaluate trade reception and distribution penetration
Design effective media plans
Standard test markets
Controlled test markets
Simulated test market
Principles of Marketing, Sixth Canadian Edition

7. Major Stages in New Product Development
Commercialization: introducing a new product into the market
Introduction timing
Figure 11.1
Market rollout or full-scale introduction
Sequential product development
Simultaneous (team-based) product development
Principles of Marketing, Sixth Canadian Edition

8. Product Life-Cycle Strategies
Product life cycle (PLC): the course of a product’s sales and profits over its life
Figure 11.2
Principles of Marketing, Sixth Canadian Edition

9. Styles, Fashions, and Fads
Style: basic and distinctive mode of expression
Fashion: currently accepted or popular style in a given field
Fad: a fashion the enters quickly, adopted with great zeal, peaks early, and decline very fast
Figure 11.3
Principles of Marketing, Sixth Canadian Edition

10. Summary of PLC (Table 11.2)
Source: Philip Kotler and Peggy Cunningham, Marketing Management: Analysis, Planning, Implementation,
and Control, Canadian 11th Edition, Pearson Education Canada, Toronto, Ontario, 2004, p. 347
Principles of Marketing, Sixth Canadian Edition

11. In Conclusion… The learning objectives for this chapter were:
Explain how companies find and develop new-product ideas
List and define the steps in the new-product development process
Describe the stages of the product life cycle
Describe how marketing strategies change during the product’s life cycle
Principles of Marketing, Sixth Canadian Edition